Cancer drugs power Genentech gain

Tax charge forces Rite Aid to take loss

Genentech Inc., the world's second-biggest biotechnology company, said Thursday that first-quarter profit climbed 12 percent on sales of its cancer drugs and by controlling expenses.

The company, which trails only Amgen Inc. in sales among biotech giants, earned $790 million, or 74 cents per share, compared with $706 million, or 66 cents a share, a year ago, though sales of its top-selling cancer drug disappointed Wall Street analysts.

Excluding special expenses, Genentech said it would have earned $895 million, or 84 cents a share. Those results beat the average per-share estimate among Wall Street analysts by 2 cents, according to Thomson Financial.

Revenue was $3.06 billion in the quarter, an increase of 8 percent from $2.84 billion a year ago but missing analysts' expectations by about $50 million.

Sales of Genentech's top two cancer drugs, Avastin and Rituxan, both rose 13 percent. But Avastin's numbers disappointed analysts, who were expecting an even greater rise after its February approval by the Food and Drug Administration to treat metastatic breast cancer.

Genentech shares closed at $78 Thursday on the New York Stock Exchange before the results were announced.

Other earnings news

Drugstore chain Rite Aid Corp. said it lost $960.4 million in its fiscal fourth quarter, mostly the result of a non-cash income tax charge, as it worked to absorb more than 1,800 stores acquired last year.

The loss amounts to $1.20 per share for the quarter ended March 1. It earned $7.1 million, or a penny a share, in the previous year's quarter.

The company said it expects to lose money in fiscal 2009 for a third-straight year.

Rite Aid blamed a tough economy and spending to integrate the 1,850 Brooks and Eckerd stores it acquired last June in an effort to keep pace with its larger rivals, Deerfield-based Walgreen Co. and CVS Caremark Corp.

Rite Aid shares fell 14 cents, or 5.1 percent, to $2.60.

Not counting the $894.9 million non-cash income tax charge, the company said it would have lost $65.5 million, or 8 cents a share. Analysts surveyed by Thomson had expected a loss of 7 cents a share on that basis.